Equal pay v the gender pay gap

The UK has made it compulsory for large companies to publish the difference in what they pay men and women.

This is called the gender pay gap - the average hourly percentage gap between the salaries received by men and women.

Gender pay gaps can be seen in almost every country in the world.

On average, full-time male employees across the EU and 35 other countries were paid 13.8% more per hour in 2014, according to figures from the Organisation for Economic Co-operation and Development (OECD).

At 1.5%, Romania's gap was the smallest, while South Korea's 34.6% gap was the widest.

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South Korea had a gender pay gap of 34.6%. according to latest OECD figures

The widespread nature of the gender pay gap suggests workplace equality has not yet been achieved.

In 2018, 78% of UK companies paid male employees more on an average (median) basis, according to BBC analysis. These firms are encouraged to come up with an action plan to reduce their gap, but are not legally obliged to.

Want to find out the gender pay gap where you work? Try the calculator below.

All British companies with 250 or more employees have to report their gender pay gaps. Last year 78% disclosed that they paid men more than they paid women.

Would the Icelandic approach work?

All large firms must prove they meet an equal pay standard agreed by the government, employers and unions, that prove pay decisions are not influenced by the worker's "social characteristics", notably their gender.

Employers are allowed to pay salaries based on performance, but only if they can demonstrate they are paying equal value for equal work.

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Iceland is often ranked best in the world for gender equality

However, focusing on "equal pay for equal work" does not address all the issues contributing to the gender pay gap at individual companies, which often reflects a concentration of men in well-paid senior roles.

What the processes do is direct employers' attention to why they pay people what they do and what each job entails.

What are other countries doing?

France - Large firms must publish five gender pay indicators - including promotions, pay increases and the gender ratio of the 10 best paid employees - generating a score of up to 100. Firms with a score of less than 75 at the end of three years of reporting are liable to a fine of up to 1% of their total payroll

Sweden - All but the smallest companies must conduct a yearly pay audit to analyse wage policy and whether equal pay practices are being followed. Those with more than 25 employees have to publish an action plan to address any disparity

Why do we still see pay discrepancies?

Although we have equal pay and other anti-discrimination laws, these have not necessarily been fully implemented.

For example, UK supermarkets Asda, Tesco and Morrisons are currently facing high-profile equal pay claims from women who say they are not paid the same as male workers doing different but comparable jobs.

One problem is that it is usually up to an employee - or their union - to challenge companies' pay practices. This could be both expensive and risky for an individual to attempt.

Shining a light

All of this means workplace equality is unlikely to be achieved by a single measure.

But that does not mean to say these policies won't have any positive effects, or that we shouldn't try to bring about change.

Gender pay gap reporting may do more to shine a light on pay practices.

The public attention it attracts may prompt firms to take action to improve women's pay and career progression to boost their reputation, but that is not guaranteed.

Salary reporting is a good first step, but the UK could make this approach more effective by requiring companies to go beyond simply reporting their gender pay gap by adopting practices likely to reduce it.

While it is early days for Iceland's equal pay strategy, early signs suggest that forcing companies to prove they compensate employees fairly may be more effective than transparency without any consequences.